A cheap new car?

Back in February, Kiplinger did a story on the 10 cheapest cars to own in 2013 that I recently stumbled upon and found interesting.

They seem to arrive at a fairly accurate conclusion on the expenses of owning a car.

"The price you negotiate for a car and the interest on your car loan are only part of the cost of owning a new vehicle. Depreciation, taxes and fees, and what you pay over the years for insurance, fuel, maintenance and repairs are all important ingredients in the long-term cost of ownership. Even the opportunity cost of out-of-pocket expenses (what you'd make by investing the money elsewhere) is part of the overall tally."

and

"The market price is the average transaction cost and reflects consumer rebates. Fuel costs are based on $3.23 a gallon for regular gasoline and 15,000 miles a year of mixed city and highway driving. The ownership cost assumes you are paying 2.76% interest on a five-year loan but that you can recoup the cost of the car, minus depreciation, when you sell the vehicle after five years."

They selected vehicles with manual transmissions (unless noted otherwise) due to fuel economy for operations costs. The cars were largely without options, though most had CD players (they're still putting them in cars?!?) and AUX input for audio options. All cars have stability control, at least 6 airbags, traction control and anti-lock brakes.

Southeast Asian companies (obviously) crushed the competition, though it might come a surprise to find a Chevy sitting at #2 but nary a Honda to be found.

I've been near or in a handful of these cars and of the 10 they came up with I'd be willing to own/drive/be found dead in the Versa, Soul, Accent(just barely), Fiesta (maybe), Forte and Corolla.

The $3000+ spread between the cars is a 10% difference from the bottom to the top of the list. Basically a $600 a year difference, or $50 a month in operating costs. All that to say the Versa is a remarkable value.

The article's focus was clearly on new cars, but I wouldn't hesitate to suggest that you can find a better deal and a better car than any of the above. There are a LOT of great cars just coming off of leases at the next level of quality above these cars. These cars generally don't have a lot of miles, have had consistent maintenance, had a complete inspection upon turn in, and most still have a fair bit of warranty left. My own family has been looking at Honda Accords from this very pool, and we are likely to move that direction (Camry is an option too) in the not too distant future.

If in good condition, or you are skilled, the car you already own is a better option that all of these most likely though. And in true Car Lust fashion, you could just spend $6000 a year on interesting older cars and just get a new one every year and not be too much worse off and likely had a more interesting (though less reliable) fleet to sample.

Comments

A couple of comments. First, the Chevy Spark is built in South Korea by GM Daewoo, so it's just as Asian as the rest of the list.

Second, I cross-shopped the Versa against the Rio we bought last winter. It was decently-equipped for the price point, and I can't say a bad word about the assembly quality. We passed on it because it felt unsteady, like you were driving a roller skate, and there was no tachometer--an utterly inexplicable omission in a modern car. The ECM is already keeping track of engine speed, and how much can it cost to add the gauge and needle and display it?

I haven't bought new in almost 30 years, preferring to buy a good used model from someone I know, thereby saving the initial depreciation costs. This includes the minor items that can go bad while the vehicle is still under warranty. Over several years I have had an '84 Crown Vic, an '89 LeSabre, and currently an '01 Park Avenue. The overall expenses have been rather low and each has served well. Additionally, each had several options.

What about pickups? Those used to be cheap, now it seems they're all enormous and expensive. I'm kind of looking for one, but there don't seem to be many small and relatively inexpensive ones anymore. At this point, I can't imagine getting a new one and would probably end up with an older Toyota or maybe a Ranger.

Anthony, the original small-ish Explorer SportTracs are 10-12 years old now. I haven't priced one lately, but I'd guess they are in the $10-$14,000 bracket now.

They seat 4 comfortably inside, but have a very small 4-foot bed. Many of them came with a plastic bed cover; I think they all had a tube bed extender, which work very well, btw. My Super Crew has one.

Since they are Ranger/Explorer based, they should be as reliable as those are.

Adjusting for inflation, a base 1957 Chevy 210 cost somewhere south of $15,000 new. (I don't have the exact MSRP, but I'd love to know.) You have to admit, that's a lot of metal and style for the money. Thirty grand for those ridiculous tiny ovoids is an insult, I don't care how many airbags and computers they have. There is no reason, with modern manufacturing and tech, that a decent full size car can't be built in America for less than ten grand.

Bike commute 90% of the time, bus 5%. I call the insurance company when I need to use it, that is about 1 time a month for 1-2 days. It works our excellent. $37 every 6 months insurance, I might pay $125 a year in gas. Repairs are pretty uncommon at -1000 miles a year.

Putting gas in a tank, paying a monthly insurance rate of $36 a month.. I cringe to consider. A car payment? Never would even remotely consider it.

Stick with used. Keep em til the wheels fall off. Service and repair as needed Unless a car is a RPOS.. why move on to something else?

Cheers, JohnB...so let's compare apples to apples here. A stripper 1957 Chevy 150 was one of the cheapest "real" cars you could buy (in other words, we're not including Crosleys, King Midgets, etc.) At $1996 new, in "2013 dollars" a 150 coupe cost about $16,600. (A little more than my reckoning earlier...the last few years' economy has hit harder than I thought!)

That's roughly 55% of the average cost of the 10 CHEAPEST cars available today. And the economic recession of '57-'58 doesn't hold a candle to the recession of the past few years. There's no real reason for choosing '57 as my example year; just a random date to show that the cost of new cars is comparatively exorbitant: even the entry-level cars at the bottom of the barrel are beyond the reach of the entry-level buyer to which they should be catering.

@Bill: The $16,600 figure is the inflation-adjusted MSRP; the figures in Chuck's post are five-year total cost of ownership--MSRP, gas, insurance, and scheduled maintenance.

A better comparison would be $16,600 MSRP for the shoebox Chevy vs. $14,500 for a base Kia Rio. (I'm picking the Rio because I have one.) The modern car is more survivable in a wreck (if only because the '57 has no seatbelts!), uses a lot less fuel, and is orders of magnitude cleaner in burning the fuel it uses. As to that last point, we pistonheads often obsess over the performance loss occasioned by first-generation smog controls, but I doubt anyone would prefer the smog over the air quality we have today.

@Cookie: That's a good point -- comparing MSRPs gives me a little more reassurance that base car prices between today and mid-century perhaps aren't so disparate as I had figured.

I'm not saying GM should be building '57 Chevys again, by the way. What the Kia (or any cheap modern car) lacks in size and style it more than makes up for in efficiency and safety.

If anything, America needs a car maker that goes even further, and is committed to the 21st century equivalent of the "Model T Formula" of cheap car manufacture: no frills, basic, sturdy, easily reparable, efficient use of materials, and as inexpensive as absolutely possible. In 1926 a Ford runabout was $260. That's only $3335 in 2013 dollars. Could a 2013 "New Model T" be sold for, say, $5000? Safe, solid, efficient, and spartan; basic transportation, no frills, NHTSA compliant. Perhaps with self-contained "plug-in module" construction to streamline assembly. Airbag modules, ABS module, A/C module, control computer module, etc., all subassembled, and easily mountable and removable to facilitate repair. Extensive use of molded plastics and pressed steel. The bodies could be semi-monocoque for a variety of bodystyles that attach to a drivetrain subframe. And like the original T, large enough to be useful, and with a purposeful and utilitarian "non-design" look to it. A natural-gas burning engine would reduce fuel costs and emissions to nearly negligible levels without costly smog controls.

Maybe I'm nuts...but there's a market worldwide for a sub-$5K car like this.